Appeal from the 333rd District Court Harris County, Texas
Trial Court Case No. 2009-16387
consists of Justices Jennings, Higley, and Massengale.
MICHAEL MASSENGALE JUSTICE.
an appeal from a take-nothing judgment in favor of German
American Farm Mutual Insurance Company on Mark Groba's
claims for breach of contract, violation of the Deceptive
Trade Practices Act, and unfair insurance settlement
practices. On appeal, Groba challenges the legal and factual
sufficiency of the evidence to support the jury's verdict
that German American did not violate the terms of an
insurance policy by failing to pay for damage allegedly
caused by Hurricane Ike.
Mark Groba owned a duplex in Galena Park, Texas, as an
investment property. The duplex was insured by German
American for a policy period from April 1, 2008 to April 1,
2009. The policy covered direct physical loss caused by
storm, including lightning, windstorm, and hurricane.
Hurricane Ike hit the Houston area in September 2008, and
five days after the hurricane made landfall, Groba reported
to German American that the duplex had sustained "roof
and window damage."
Burklund, the in-house claims adjuster for German American,
received Groba's claim and assigned it to Dana Holbrook,
an independent claims adjuster. In addition to working as a
claims adjuster, Holbrook had a background in construction,
home repair, and contracting. Within one month of the
hurricane, Holbrook inspected the duplex, took photographs,
and prepared an estimate for repairing property damage. His
estimate was based on his experience, observations,
photographs, and an analysis performed with Powerclaim
concluded that three items required repair due to windstorm
damage: the roof, a soffit, and a window. He opined that
replacement of the entire roof was not necessary. He
estimated a cost of $325 to secure a loose section of the
roof with a new fastener and to replace a small section of
missing eave metal. He estimated a cost of $75 to secure a
soffit that had become loose and a cost of $117 to replace
and reglaze a window, which had sustained damage to two of
its window panes. Although he observed peeling,
discoloration, and warping of plywood siding, he did not
estimate a replacement cost due to his determination that the
damage was caused by age rather than hurricane damage.
written estimate reflected the insured's deductible and
recommended a payment of $464. The written estimate
incorrectly listed an additional insured and incorrectly
identified the street number of the duplex. Burklund struck
through and corrected those errors. Holbrook also mistakenly
calculated the deductible based on the replacement cost
instead of the actual cash value, which is the replacement
cost less depreciation. As such, Holbrook had deducted $53.00
instead of $51.70, resulting in an actual cash value payment
to Groba of $464.00 instead of $465.30. Burklund corrected
this error, crediting an additional $1.30, and within days he
mailed a check to Groba.
trial, Groba testified that after the storm there was debris
everywhere, and a fence was lying on the ground. He did not
initially report to German American that a tree had fallen.
When Groba later showed Holbrook the property, he said that a
tree had broken a window pane and that the roof was damaged.
Groba said that Holbrook measured the roof completely, took
photographs, and spent "no more than 20 to 30
minutes" looking at the property. Believing that German
American had underestimated the amount of damages
attributable to Hurricane Ike, Groba did not cash the $465.30
check, and instead he filed this lawsuit. At trial, he sought
approximately $27, 000 in damages, plus attorney's fees.
support of his damages estimate, Groba presented testimony
from Daryl Quinney, a construction expert and investigator.
Quinney visited the duplex twice at least six months after
the hurricane. In conducting his investigation and making his
estimate, he assumed that the damages he observed did not
exist before Hurricane Ike, saying: "I was there to do a
Hurricane Ike investigation so, therefore, my assumption is
those damages resulted from the wind of Hurricane Ike."
His estimate was based on his observations, photographs, and
loss estimation software.
trial, Quinney testified that the roof sustained the
following damage due to hurricane-force winds: (1) the roof
panels lifted; (2) fasteners came off; and (3) flying debris
struck and damaged roof panels, causing six dents in the
bottom edge of the panels. He opined that the cause of the
roof damage was "wind speed and uplift of Hurricane
Ike." He also opined that the most cost-effective repair
would be to fully replace the metal roof. He estimated that
this would cost $12, 400.38. This included the cost to remove
a shingle roof which was beneath the later-installed metal
roof. Despite having found no water intrusion beneath the
metal roof, he expected to find water intrusion that would
warrant replacement of part of the roof decking, and he
included the cost for that in his estimate as well. In
addition, and without knowing if there was any moisture in
the attic, he recommended treating the attic with a chemical
to prevent the growth of mildew. Quinney also found exterior
damages related to a cornice, painted plywood siding, and a
damaged window that needed replacement. His total written
estimate for repairs, which was admitted into evidence at
trial, was $27, 934.25. But Quinney's written estimate
was divided into five categories, each with a subtotal, and
the sum of the five subtotals was $22, 815.71, not $27,
Mildew repellant attic space
$ 1, 909.76
Cornice and siding